A-G defends decision not to charge 1MDB

Malaysian Attorney- General Mohamed Apandi Ali said yesterday that 1MDB could not be blamed for failing to disclose information when the central bank did not request it in the past.PHOTO: THE STAR/ASIA NEWS NETWORK

He also says the authorities acted lawfully in detaining two critics of the state investor

Under pressure owing to the 1Malaysia Development Berhad (1MDB) controversy, Malaysia's public prosecutor yesterday defended his decision not to bring the state investor to court and to charge its critics instead.

Bank Negara Malaysia (BNM) said last week that it had asked Attorney-General Mohamed Apandi Ali to prosecute the troubled firm under the Exchange Control Act for allegedly submitting inaccurate or incomplete information to gain approval for a US$1.83 billion (S$2.6 billion) investment in a joint venture with Saudi oil firm PetroSaudi.

But Tan Sri Apandi said yesterday that 1MDB could not be faulted for failing to disclose information when the central bank did not request it in the past.

"If BNM does not request certain or specific information, how could 1MDB be faulted as it has filled up the form as required and responded to queries made?" he said at a press conference, referring to documentation that the company had filed between 2009 and 2011 regarding the foreign investments made.

He also said the authorities were acting lawfully in detaining a duo - who have been campaigning globally to uncover alleged financial misconduct in 1MDB - for up to a month using security measures that automatically deny them bail.

REGULATOR GAVE THE GO-AHEAD

Mr Apandi noted that "when 1MDB requested Deutsche Bank (Malaysia) Berhad to remit to a different account" from that approved by the central bank, Deutsche sought clarification from the regulator. But BNM advised Deutsche that it was a business decision and gave the go-ahead "as long as there was no deviation from the purpose intended".

On Monday, influential ruling coalition veterans led by former premier Mahathir Mohamad - who has campaigned fiercely for Prime Minister Najib Razak's removal - accused the government of abuse of power in the 1MDB saga, especially in the use of the Security Offences (Special Measures) Act, or Sosma, to detain the duo - former Umno branch chief Khairuddin Abu Hassan and his lawyer Matthias Chang.

The veteran leaders said the law had been meant to curb terrorism.

Mr Apandi clarified that the "definition of security offences makes it clear that the Sosma is not limited to terrorism".

According to the Penal Code, under which the duo were charged on Monday for allegedly attempting to sabotage Malaysia's banking system, "sabotage" can be defined as an act or omission intending to cause harm to "essential services", which include banking and financial services, the country's top lawyer said.

On BNM's claims, Mr Apandi noted that "when 1MDB requested Deutsche Bank (Malaysia) Berhad to remit to a different account" from that approved by the central bank, Deutsche sought clarification from the regulator.

But BNM advised Deutsche that it was a business decision and gave the go-ahead "as long as there was no deviation from the purpose intended".

"BNM being the controller did not stop the remittance or direct... a review of the permission. There was no information or further information requested by BNM at that material time," he explained.

"In this respect and the fact that there is no new evidence made available, we do not see the necessity to review (our decision)," added Mr Apandi, who did not take questions from the press.

1MDB has struggled to meet obligations due to RM42 billion (S$14.2 billion) in debt raked up in just five years.

In July, it was reported that US$700 million linked to the firm had been deposited in its advisory chief Mr Najib's private accounts.

But the Malaysian Anti-Corruption Commission (MACC) has said that the money was a political donation from unspecified Middle Eastern donors.

MACC deputy chief commissioner Mohd Shukri Abdull told the media yesterday that they could not say when a probe into the donation would be completed "due to the complexities of the investigation, which involves foreign parties".

The National Audit Department also said yesterday that its review of 1MDB's accounts would be completed only after another three months, instead of by the end of this year, as earlier promised.

A version of this article appeared in the print edition of The Straits Times on October 14, 2015, with the headline 'A-G defends decision not to charge 1MDB'. Print Edition | Subscribe

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